Business and environmental sustainability are not natural bedfellows. Business is about making money. Sustainability is about protecting the planet. Business is measured in months and quarters. Sustainability often requires significant short term costs to secure a sometimes uncertain long-term benefit. To some activists, all executives are exploitative, selfish one percenters. To some executives, all activists are irresponsible, unyielding extremists. And yet engaging with the issue isn’t optional – all businesses must have a strategy to deal with sustainability and, like any strategy, this involves making choices. This Strategy and Sustainability course based on Rosenberg's recently published book by Palgrave (http://www.palgrave.com/la/book/9781137501738) that encourages learners to filter out the noise and make those choices in a hard-nosed and clear-eyed way. Prof. Rosenberg’s nuanced and fact-based point of view recognizes the complexity of the issues at hand and the strategic choices businesses must make. He blends the work of some of the leading academic thinkers in the field with practical examples from a variety of business sectors and geographies and offers a framework with which senior management might engage with the topic, not (just) to save the planet but to fulfill their short, medium and long-term responsibilities to shareholders and other stakeholders. This course promises to be both engaging and thought-provoking, aimed at anyone who wishes to gain a deeper understanding of a subject that is no longer perceived as a choice but a necessity for future managers and business leaders alike.
5. China & India
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Del curso dictado por IESE Business School
Strategy and Sustainability
117 calificaciones
De la lección
Week 5 - Differences Across Industries and Around the World
This session explores differences across business sectors including automotive, oil & gas, fast-moving consumer goods, mining, and IT/consumer electronics. We will also contrast the situation in the United States with Europe, China, India, and Africa. Learning Objectives: To underline the importance of adapting a specific firm’s strategy to its sector, its geographic scope and even the nature of its ownership and governance structure prior to developing a specific strategic response.
Conoce a los instructores
Mike RosenbergAssistant Professor
Strategic Management
[MUSIC]
This is Mike Rosenberg, and strategy and sustainability,
we are in section five, talking about differences, this is segment five,
in terms of what's special in those two countries regarding environmental issues
at how business relates to the environment.
China and India are linked by many things.
They're linked by geography, they're linked by history.
Not everybody knows that in 1962, the two countries went to war,
while the United States and Russia were involved in the Cuban missile crisis.
Chine attacked India along its 3,000 mile border, occupying some provinces, well,
there's two parts of a province which is under dispute.
That issue is access to the Himalayan mountains, and then very, very high up
4,000 meters high, there's land which both countries kind of claim as their own.
And the relationship has kind of been tense, but cordial ever since.
One of the issues that are at a geopolitical level
is the situation in Tibet, and the Dalai Lama, who lives in India.
And of course, China occupied Tibet, and
believes that Tibet should be part of China.
And many people believe that Tibet should be independent.
In any case, they are cordial.
Here's an image with Prime Minister Modi and President Chi last year, and
there is an increasing in commercial trade and
political relationships between the two countries.
China, of course, is enormous.
It's enormous by any measure, and talking about anything you'd like to talk about.
It's the world's third largest country.
It's got vast deposits of coal and other minerals.
It does have, however, several water shortages in the north.
There still is water in the south, and we'll talk a little bit about that.
China's population is enormous.
It's becoming richer.
Demanding tremendous amounts of sensibility and regulations.
And they surprise me by showing how much sensibility they had towards environmental
issues, and by stating emphatically that the Chinese government was obliging them
to have kind of the same environmental standards as many places in the west.
China does not allow interest groups to operate, really, in the country.
And on a kind of geopolitical basis, as I said earlier,
has agreed to have its carbon emissions hit a peak, and then go back down.
But on this issue of enforcement, it's a very complicated situation.
The Chinese government has centralized ministries on different things, but
then enforcement is a local issue.
And in most countries, when enforcement is local,
the local people can be influenced by local politics to look the other way,
or to allow local businesses to do what they need to do to make money.
However, China is also very much paying attention to corruption across the country
with a very, very high profile cases of people going to jail for offenses.
So, China is, right now, in a very, very interesting and
very complicated situation, with respect to environmental regulation.
The issues there are fundamentally air and water.
Here's an image of, you can get an app for
your phone, which says how bad the air quality is in the major cities of China.
The image below is Chongqing, where you can't even see, because of the smog.
These children are in a dome.
The International schools in Beijing are kind of competing with each other for
their dome play areas, so that the kids can play, and
they can play badminton in a controlled and clean air environment,
because you don't really want the kids to go outside very often.
People I know that live in Beijing, they live in houses with air filters.
They drive cars with air filters, and
their kids go to schools with play areas indoors.
So, it's a very exaggerated situation right now in terms of air quality.
And the water quality is also suspect.
In the first place, as I said earlier, there is not enough water in the north.
And the Yellow River is actually running dry from time to time,
before it gets to the sea.
So, there's this enormous project called the North, South Water Transfer Project,
which is to move water from the relatively water rich south to the north.
This is a project that China's been working on for
many years about $80 billion spent so far, and there's still quite a lot to go.
And now the western route is a little bit controversial,
because in the western route, they want to divert water high up in the Himalayas, and
some of that is the source of rivers that come down into India.
So again, these countries are linked through the reliance
on the snow melt coming down the Himalayas.
This is an image of the river in Chongqing,
this is the river that which turned red in 2012,
because of an accident and some chemicals which got dumped into it.
And this is an image of normal river in China,
which is just terribly polluted with lots of garbage in the sea.
So, these are two of the critical issues that Chinese will have to figure out.
India is in a different situation.
It's in some ways similar, but in many ways, different.
It's got very little oil and gas, huge amounts of coal.
And while water is plentiful in the country as a whole,
many people are suffering in what's called economic water stress,
which means that yes, there's water on the land, but there is no sanitation or
access to fresh water in the village, because no one wants to pay for it.
India's population can be segmented in different ways, rural and urban is one.
And then you've also got different levels of rich and poor people,
which really define the way India works as a country, if you will.
In terms of its environmental legislation and its sensibility, large Indian
companies are producing reports, and they say they comply with all legislation.
The legislation is, in fact, very, very advanced.
India has a very strong legal tradition and very, very strong environmental laws.
The enforcement of those laws, however, is a bit suspect.
And whether the companies actually do what they say they do,
again, is some matter for some debate.
The interest groups there, and there are interest groups, in India,
there are, Greenpeace is there,
many of the international interest groups are there, as well as local groups.
But they're under some pressure from the government, because the government feels
very strongly that India needs to become more prosperous.
One of Prime Minister Modi's issues is 40% of the country lacks access to
electricity.
So, he's not ready to curb its development of coal fired power plants
until someone can offer him a solution.
And one of the key points in the Paris Accord was the creation of
the $100 billion fund exactly to finance alternative energy products and
low impact carbon projects to be able to provide people in India and
other developing countries with access to basic necessities.
And a lower carbon footprint, perhaps, than they would do so on their own.
It's a huge issue in the international debate, but
if you look at India, again, it's air, water, and waste.
This is a chart from the World Health Organization
about the world's most polluted cities.
And if you look at the chart, Delhi is at the top of the list.
Five of the top ten worst cities in the world are Indian cities.
So, while China gets a lot of attention as being a place with terrible air pollution,
India is actually worse.
This is a picture of the great Ganges river.
Mother Ganges,
as they call her in India, which is really the lifeblood of the country.
Both in real terms, in terms of economic prosperity, and water for people.
But also, even in religious and spiritual terms.
And then Ganges is deeply polluted.
It's got a tremendous crisis of pollution.
In fact, the government has a program in place to clean it up, but
the program seems to be stalled.
The ideas are great, but I'm not really sure if it's actually getting the traction
on the ground, and India's also suffering under mountains and mountains of garbage.
And in fact, India has been a place to send garbage, because you can actually
send your garbage to India, where you'll get, poor people will pick through it, and
that's cheaper than dealing with garbage back in the west.
So if we look at the different strategic options, again, we get this great
dichotomy where some international companies operating in India and
China are very much at a show and tell, or a wait and see operation,
where they're compliant with all the laws and going a little bit further than that.
And there's a suspicion that a whole bunch of
local companies are doing much much less.
You don't have a lot of Chinese companies in pay for principle, or
going far, far, far out.
Although, you do have in certain segments, in wind energy and electric cars,
certain companies which are doing quite a lot.
So again, it's a very complicated situation which really needs to be looked
at for a specific industry, for a specific part of one of these countries, and
specific moment of time.
[MUSIC]
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